Madhya Pradesh solar bids bottom out at Rs2.99 per unit in reverse auction

New Delhi, Feb. 10 -- Is Rs3 per kWh the new normal for Indian solar power tariff? The ongoing auction for world's largest solar power plant in Madhya Pradesh heralds the trend with tariffs hovering at a low of Rs2.99 per unit in the ongoing reverse auction for the 750 mega watt (MW) capacity.
The auction, which is still on since Thursday, saw prices plunge to Rs 2.99 per unit for all the three packages of 250 MW each. Of the 20 initial bidders, the firms still in the fray include Green Infra Wind Power Project Ltd, SBG Cleantech Ltd and Enel Green Power SpA.
While Green Infra is promoted by Sembcorp Industries Ltd, SBG Cleantech Ltd is promoted by Japan's Softbank.
"The reverse auction which went on all night is still on," said a person aware of the development requesting anonymity.
Another person who also didn't wish to be identified said that the firms still left in the fray were Sembcorp, Enel and SoftBank.
The bids are being conducted by Rewa Ultra Mega Power Ltd, a joint venture between Solar Energy Corp. of India Ltd and Madhya Pradesh Urja Vikas Nigam Ltd.
Mintreported on Thursday about India's solar power tariff is set to witness another round of an aggressive bidding war by leading domestic and global firms when the world's largest solar power plant coming up in Madhya Pradesh.
Spokespersons for Green Infra Wind Power Project Ltd, SBG Cleantech Ltd and Enel Green Power SpA couldn't be immediately contacted.
The solar space has already seen a significant decline in tariffs from Rs10.95-12.76 per kWh during FY11. Friday's development assumes significance given the comparison with conventional sources of electricity such as coal.
India's demand for renewable energy is expected to grow by seven times in 2035, according to the latest BP Energy Outlook, which means the share of renewable energy in the country's fuel mix will increase from 2% to 8% in 2035.
India, the third-largest energy consumer after the US and China, plans to achieve 175 gigawatt (GW) of renewable energy capacity by 2022 as part of its global climate change commitments.
The government says India has a renewable energy potential of around 900GW.